Treasury Secretary Lew answers questions over role of FSOC

U.S. Treasury Secretary Jack Lew, who also chairs the Financial Stability Oversight Council, answered questions during a Wednesday hearing regarding the role of the FSOC, adding that clarification for the implementation of Dodd-Frank rules is necessary.

Sen. Mike Johanns (R-Neb.) asked Lew how the FSOC determines whether or not a firm should be designated as systemically important. Lew said the council examines whether entities or their activities pose a risk to the financial system, adding he wants the FSOC’s designations to hold up against criticism.

Sen. Jerry Moran (R-Kan.) said many small institutions have voiced concern about the impact of regulations on their ability to lend, adding some institutions have said they will pull out of the market.

Lew said federal regulators are trying to keep small institutions’ concerns in mind and that he hopes the concerns will subside after some Dodd-Frank rules are clarified.

Additionally, Lew pointed to the challenges posed by cybersecurity threats, saying the solutions must evolve with the problems. Sen. Barbara Mikulski (D-Md.) said the committee will likely look at cybersecurity in the future.